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Tesla lowers price of China Model 3 to undercut BMW and Mercedes in strategic play
Tesla reduced the price of its Rear-Wheel Drive Made-in-China (MIC) Model 3 to RMB 299,050 or $42,919 after government subsidies. The price of the mass-produced electric sedan was initially pegged at $50,000, but in a surprise update on Friday, the Elon Musk-led electric carmaker lowered its price beneath a major psychological barrier of RMB 300,000, just days before the significant January 7 date. The price of the Dual Motor All-Wheel Drive Model 3 Long Range and Performance variant remains the same at 439,900 yuan ($63,086) and 509,900 yuan ($73,124), respectively.
The 16 percent price reduction on locally-produced Model 3 is made possible by new energy subsidies recently announced by the Chinese government. Tesla offers as much as RMB 24,750 savings for private purchases and RMB 17,325 for those operating new energy passenger cars. The Tesla China website now displays the adjusted prices of the locally-made Model 3s.
Tesla’s price reduction puts Model 3 in a category that’s strategically aimed at the entry-level luxury sedan category, with concentrations on Mercedes C Class and BMW 3 Series.
The question is if you were a Chinese customer, what would you buy?
1. A Tesla Model 3 starting at ¥299,050
2. A BMW 3 Series starting at ¥313,900
3. A Mercedes C300 starting at ¥308,000— Legacy 🚗 is f**ked (@tesla4k) January 3, 2020
Here comes the first order confirmation right after MIC #Model3 price drop today. More sales are on the way. Now Model 3 costs less than Merc C Class and BMW 3 Series. More young ppl will be able to afford Model 3s. Shoutout to @elonmusk @teslacn pic.twitter.com/A5S8qWcrif
— Ray (@ray4tesla) January 3, 2020
The latest development follows the announcement of the electric carmaker that the second round of Made-in-China Model 3 deliveries will happen on Jan. 7 at the Gigafactory Shanghai facility where the first 15 units of the mass-produced electric sedan were symbolically handed over to employees of Tesla.
The company also revealed during the Gigafactory 3 Delivery Ceremony that 30 percent of the parts used to build the Model 3 in China is locally-sourced, but with plans to completely localize its supply chain and open the possibility to more price adjustments in the future.
The cheaper entry-level Model 3 can help Tesla lure more customers away from local electric car makers and global brands in the largest EV market in the world. Tesla believes China could become the biggest market for its Model 3 and it might well be a key market that can help it achieve sustained profitability.
Recently, Tesla also announced that the Gigafactory 3 in Shanghai has achieved its Model 3 production goal and has been rolling out 280 cars per 10-hour shift or roughly 1,500 units a week. It plans to ramp up production and will likely hit 3,000 Model 3 a week when more production workers join the frontline.
The China arm of the Palo Alto, California-based company has been doing a hiring spree to add more people to help in different production line positions such as quality control, welding, painting, powertrain, and assembly, among others.
The first deliveries of the Made-in-China Model 3 happened exactly 357 days after the Gigafactory facility broke ground, an amazing feat for the first car plant in China wholly owned by a foreign carmaker.
A Tesla Cybertruck driver in the United Kingdom had their all-electric pickup seized by local police in the Greater Manchester area after the department cited “legitimate concerns.”
Last Thursday, police saw the pickup on the roads and decided to pull the driver over. Greater Manchester Police said:
“Whilst this may seem trivial to some, legitimate concerns exist around the safety of other road users or pedestrians if they were involved in a collision with the Cybertruck.”
🚨 A Tesla Cybertruck, which is illegal to drive in the UK due to safety concerns, has been seized by police in Greater Manchester
“Whilst this may seem trivial to some, legitimate concerns exist around the safety of other road users or pedestrians if they were involved in a… pic.twitter.com/cqhdPok3DM
— TESLARATI (@Teslarati) June 16, 2026
The Cybertruck in question was, according to the BBC, registered and insured abroad and was confiscated. The driver, who is a UK resident, was reported.
The Greater Manchester Police Department then added:
“The Tesla Cybertruck is not road-legal in the UK and does not hold a certificate of conformity.”
The Cybertruck cannot be legally driven in the UK because it has no UK Type Approval for operation in the country. This is due to some safety concerns, which are related to its angular shape and design. The stainless steel exoskeleton has sharp edges and projections that violate UK/EU rules on pedestrian protection.
Tesla has considered creating what it referred to as an “international version” that would be approved for operation in Europe. However, there has been no real movement on that front by the company, as it has been focused on the Robotaxi rollout primarily.
A new report claims that Apple is in the process of developing what would be the missing link for Tesla to get CarPlay.
Apple and Tesla have been reportedly working together for some time to give Tesla owners the opportunity to utilize CarPlay within their vehicles. While many owners are more than happy with Tesla’s in-house UI, which is seamless, effective, and smooth, some still want CarPlay, which does have its advantages.
A report from 9to5Mac now states that a new CarPlay technology that was highlighted during the Worldwide Developers Conference (WWDC) would potentially be the bridge between Tesla and Apple. With the addition of a feature known as “Route Sharing,” which gives a navigation app the ability to share routing data with the vehicle, Tesla would be able to launch CarPlay in its vehicles, the report states.
CarPlay has not been a priority for Tesla because it has done extremely well with its in-house UI, but some drivers are just used to it. Additionally, it could improve Tesla’s subpar Navigation or offer improved app capabilities, especially with iMessage.
Route Sharing is an intended addition to CarPlay’s iteration in iOS 26.4, which was released in March:
The addition of CarPlay would undoubtedly be welcome, but at the same time, it seems like Tesla realizes it is not of the utmost priority. There are so many things that Tesla is working on currently within its own vehicles, especially attempting to solve self-driving.
Back in February, Bloomberg had reported that Tesla was still working on bringing CarPlay to its vehicles, but it had not due to app compatibility issues and incredibly low adoption rates of iOS 26.
This bottleneck could buy Tesla the proper amount of time to develop CarPlay for its vehicles. It would be a welcome addition, and could be brought on with either the Summer or Fall 2026 Software Updates.
Tesla deliveries got a big boost in expectations from Wall Street firm Goldman Sachs, who believes the company will report some stronger-than-expected numbers when the second quarter comes to an end in the coming weeks.
Goldman Sachs has raised its vehicle delivery forecast for Tesla (NASDAQ: TSLA) in the second quarter of 2026, signaling growing confidence in the electric vehicle leader’s near-term momentum despite mixed market signals. Analyst Mark Delaney lifted the bank’s Q2 estimate to 420,000 units from a previous 405,000, surpassing the Visible Alpha consensus estimate of 400,000.
The upward revision stems from stronger-than-expected sales data across key regions. Europe stands out with projected year-over-year growth of 85-90 percent, driven by robust demand for Tesla’s Model Y and refreshed offerings. China posted high single-digit gains, while markets like South Korea and Australia also contributed positive momentum. These gains help offset mid-teens declines in U.S. deliveries through May, where broader EV market headwinds and competition persist.
Goldman extended its optimism to the full year, increasing its 2026 delivery projection to 1.73 million vehicles from 1.72 million. Longer-term forecasts remain unchanged, with 1.88 million units expected in 2027 and 1.96 million in 2028. The bank also nudged its 2026 earnings-per-share estimate higher to $1.35 from $1.30, reflecting anticipated margin benefits from higher volumes and operational efficiencies.
Despite these positive adjustments, Goldman maintained its Neutral rating and $375 price target on Tesla shares. At current trading levels near $411, the stock sits about 8-9 percent above the target, highlighting ongoing valuation concerns even as delivery momentum builds. Tesla’s Q1 2026 deliveries totaled 358,023 units, setting a baseline for recovery expectations in the current period.
This update arrives as Tesla prepares to report official Q2 figures shortly after June 30. Investors and analysts will closely watch not only headline delivery numbers but also regional breakdowns, average selling prices, and progress on energy storage deployments and autonomous technology initiatives.
The move by Goldman Sachs underscores a broader narrative for Tesla: while legacy auto markets face softening demand and tariff uncertainties, Tesla’s global footprint and product pipeline provide resilience. Europe’s surge reflects pent-up demand and policy support for EVs, while China’s steady growth highlights Tesla’s competitive positioning against local rivals.
Tesla still has its work cut out for it, including U.S. price sensitivity and intensifying competition. Yet Goldman’s revision adds to a series of analyst notes suggesting Q2 could mark a turning point. As Tesla pushes toward higher production rates at facilities in Fremont, Shanghai, and Berlin, sustained execution will be key to validating these higher forecasts.
We have said numerous times that deliveries are becoming a less important metric in the grand scheme of things, as AI truly takes precedence in the company’s thesis.
For Tesla bulls, the Goldman note reinforces faith in underlying demand trends. For skeptics, the unchanged rating serves as a reminder that delivery beats alone may not immediately resolve valuation debates in a high-interest-rate environment. Tesla’s stock reaction will likely hinge on the official numbers and management commentary in the coming weeks.
Tesla Cybertruck driver gets pickup seized for ‘legitimate concerns’ in UK
Apple is developing the missing link for Tesla to get CarPlay: report
